Measure O proposes adopting a 1% transaction and use (sales) tax for a period of 40 years to provide the funds needed by the John C. Fremont Healthcare District to design, construct and equip a new community hospital that meets all applicable seismic safety and other building standards, and to modify and repurpose existing facilities to better satisfy the emergency medical care and other healthcare needs of Mariposa County residents and visitors for generations to come. Here are answers to the questions voters have had and are most likely to have about the initiative.
The Need for a New Hospital
John C. Fremont Hospital is facing closure in 2030 for not being in compliance with the state's seismic safety standards. Major earthquakes have caused many California hospitals to suffer significant damage, forcing them to suspend some or all services, and some patients have died either during or after these earthquakes. In 1994 Senate Bill 1953 (SB1953) changed the California Health and Safety Code to require all hospitals to comply with the more stringent seismic safety standards established by the Office of Statewide Health Planning and Development (OSHPD) by 2030 or face closure. This initiative will provide the funds needed by the John C. Fremont Healthcare District to come into full compliance by constructing a new seismically safe hospital.
Yes. A hospital that does not meet SB1953's structural and nonstructural requirements "shall not provide acute care services or beds" after the 2030 compliance deadline. Acute care includes the emergency room. SB1953 requires "no later than January 1, 2030, owners of all acute care inpatient hospitals to demolish, replace, or change to non-hospital use, all hospital buildings that are not in substantial compliance, or seismically retrofit them so that they are in compliance with the standards." The bill further requires "the State Department of Health Services to suspend or refuse to renew the license of a hospital that has received a notice of violation." The state has formally notified the District that John C. Fremont Hospital does not comply with the standards.
The District has made several attempts to be exempted from the law on various grounds or to meet less stringent requirements more suitable to our situation. Unfortunately, none of these efforts has succeeded.
No. This is yet another unfunded mandate coming from Sacramento, so the community is on its own to fund the project.
A Citizens Initiative is both a right and a power provided to California citizens by the California Constitution. It is the purest form of democracy, where voters govern themselves directly. The proponents of a Citizens Initiative are not controlled by and do not answer to any governmental entity, such as the John C. Fremont Healthcare District or the Mariposa County Board of Supervisors. The effort begins by filing a Notice of Intention to Circulate Petition with the County Elections Department, and if enough signatures are gathered, normally culminates in a measure being placed on the ballot in the next regularly-scheduled election.
The Citizens Initiative, Measure O, required gathering a sufficient number of signatures of registered voters to proceed. The signatures needed to be certified by the County's Elections Department, and then the initiative went to the County Board of Supervisors who placed the measure on the ballot for the June 7, 2022, Primary Election, where it will require a majority of voters to pass.
It required 835 signatures, but the raw count of signatures turned in was 1706.
All organizing, signature-gathering and campaign expenditures are being paid by the Citizens to Save the Hospital committee from modest donations contributed by local residents. Committee members are all volunteers; there is no paid staff and there are no major donors. The committee is registered with the California Fair Political Practices Commission (FPPC #1438403), and files periodic reports with the FPPC and the County Elections Office.
The USDA provides loans for hospital construction and their loan period runs for 40 years. The 1% rate will generate sufficient annual receipts to pay for what the project is estimated to cost. A shorter term, such as the 30 years commonly used for a home mortgage, would require a higher rate, while a longer period would make it more difficult to secure bonds or loans.
The intended uses are limited to those outlined in the Expenditure Plan included in the Measure O, which reads as follows: "Tax revenues pursuant to this ordinance shall be used, throughout the period the tax is being imposed, to fund the Healthcare District's expenditures for the following purposes:
● To design, construct and equip a new community hospital that meets all applicable seismic safety and other building standards (The new hospital is to be strategically situated on the campus where the existing hospital and other District facilities are located.)
● To modify and repurpose existing facilities, including the existing hospital, Ewing Wing, main and satellite clinics, and administrative offices, to better satisfy the current and future healthcare needs of Mariposa County residents and visitors
● To cover other expenses directly related to funding, administering and completing the above projects"
If successful, this measure will provide the following benefits to the residents of Mariposa County for generations to come:
● Ensure that your new hospital and its emergency room remain fully operationally during any natural disaster to provide essential medical care 24/7
● Enable the expansion and/or enhancement of emergency and other medical care to treat more patients more quickly and more effectively
● Fund the renovation of both the Mariposa and Northside clinics as needed
● Keep 200 well-paying jobs supporting the local economy while also keeping current residents from feeling the need to move away to be close to emergency care
● Make it easier for the Healthcare District to attract and retain the highly qualified medical professionals, including specialists, needed to better serve our community
For most Mariposa County residents, John C. Fremont Hospital is the closest emergency room while at home, at work or running errands. All county residents, regardless of where they live, are eligible to receive life-flight air ambulance transport, home health and hospice. Residents who live closer to hospitals in neighboring counties may also shop more frequently at stores in those counties and will, therefore, not be paying the Mariposa County sales tax when they do.
Why a Sales Tax?
It is a way to tax tourists. Unlike the property or parcel taxes paid only by Mariposa County property owners, sales taxes are also paid by tourists for the meals they eat in our restaurants, and the souvenirs and supplies they buy, including in Yosemite Valley. Their contribution amounts, in effect, to a subsidy for funding the project.
State law prohibits special districts like the John C. Fremont Healthcare District from assessing a Transit Occupancy Tax (TOT), also known as a bed tax.
A 1% sales tax will raise approximately $2,800,000 annually, and inflation will cause that amount to increase over the years. It is important to note that about one-third of Mariposa County’s total sales tax receipts come from purchases made by tourists.
That depends on what residents buy and where they shop. Unprepared food bought in grocery stores and medicines purchased in drug stores are not taxed. Goods purchased in stores are, but only when purchased in Mariposa County or online. In other words, when shopping at stores or dining in restaurants in Merced, Modesto, Oakhurst, Fresno or other neighboring cities, residents will pay the local sales tax for those counties, not Mariposa County’s sales tax. This is also why tourists pay our sales tax for purchases made here.
Regrettably, many rural hospitals facing this same unfunded mandate for seismic safety have closed or are considering closing. The closure of all these rural emergency rooms is one reason why wait times have increased in urban and suburban emergency rooms. Those that do endeavor to remain open must do what the John C. Fremont Healthcare District is doing: obtain special funding through property taxes, parcel taxes or sales taxes — the only three options available to healthcare districts in California.
Hospital foundations serving affluent communities are often able to raise significant sums of money to support various projects. And the JCF Hospital Foundation does help support the Healthcare District in a variety of ways. But unlike the San Francisco Bay Area, for example, Mariposa County has no billionaires able to donate the millions of dollars that will be needed to build a new hospital.
The District is constantly pursuing grant opportunities. While there are no grants available that cover general construction costs, some will cover certain regular operating expenses, freeing up District funds to be used for other purposes, including some of the costs for repurposing existing facilities. So while grants will help, they will not directly fund the construction of a new hospital.
The current 0.5% sales tax is set to expire, so the District will only be receiving 1.5% for just over two of the 40 years, from January 2023 to March 2025, after which the total will be 1.0% or a one-half percentage point increase over what is being paid now. By the time it expires, that tax will have paid off previous debt (in the form of bonds) to fund an expansion project that began in 1994 to enable the District to offer more services and achieve its current strong financial footing. Good finances are essential to getting an affordable bond or loan for building the new hospital and making the other improvements being funded by Measure O.
No. While the five permitted expenditures under Measure G did include "Replacement or expansion of facilities, other improvements to existing buildings and grounds, planning and construction of new buildings, satellite clinic(s), additional parking and acquisition of property," the amount (0.5%) and term (20 years) were insufficient to design, construct and equip a new hospital. Measure G funds were used to pay for the following capital improvement projects:
- Construct Clinic I adjacent to the hospital
- Expand the hospital’s Emergency Room to a 4-bed Emergency Department
- Purchase and renovate the Specialty Physician Office across the street from the hospital
- Open and equip the Northside Clinic
- Remodel the X-ray Department and Lab
- Purchase or lease patient care and medical imaging equipment
- Add air conditioning to the hospital
- Expand the parking area
It is important to note that even after the new hospital is fully operational, most of these capital improvements will continue to serve the community.
Some two-thirds of Californians already pay 8.75% or more in sales taxes, and over 80% pay 8.25% or more. Many pay as much as 10.25%. In each community throughout the state the local electorate has voted to support the additional sales tax (beyond the state's base rate of 7.25%) because they want the benefit provided. In our case, that benefit will be a new, modern hospital and emergency department to serve the community for generations to come. Merced already pays 8.25% and Fresno pays 8.35%.
The District will build a new hospital that meets the strict seismic safety standards required by state law. The new hospital, to be built on the existing campus next to the current hospital, will include an expanded and enhanced emergency department with enough beds to reduce wait times significantly, a surgical suite with a recovery area, easily accessible diagnostic equipment, more individual acute care rooms with adjoining private bathrooms, a new lab, a pharmacy, and many other useful services. To ensure the new facility meets the community's needs, the hospital staff will have an opportunity to provide input during the design and approval phase.
Unfortunately no. The reason is the low birth rate in Mariposa County, which makes it impossible to cost-justify having a maternity unit. In the early 1990s the District applied to build a new maternity wing, but the state denied the application owing to the low birth rate. This same situation exists across the country where most rural hospitals no longer operate maternity units.
Yes, the District's Board of Directors has given this and other options careful consideration, including in consultation with other healthcare districts, as well as with professional architects and engineers specializing in hospitals. Attempting to renovate a 70-year-old structure and all its systems (electrical, mechanical, plumbing, ventilation, and fire and life safety) to meet current seismic safety standards would be very disruptive to existing services and the potential for unforeseen problems could well end up making this approach cost more than the knowable cost of new construction. New construction has the additional advantage of being better able to accommodate the increasingly sophisticated medical imaging and lab equipment. Fortunately there will be ways to repurpose the existing hospital for other needs, and that is part of the project (see question below).
That is simply not an option anywhere in California, where emergency departments must be part of acute care hospitals that provide a full range of healthcare and related services. According to Senate Bill 687, the State Department of Public Health "shall not license a stand-alone emergency room, freestanding emergency department, or freestanding emergency center that is not part of a general acute care hospital facility providing 24-hour inpatient care with basic services, including, but not limited to, medical, nursing, surgical, anesthesia, laboratory, radiology, pharmacy, and dietary services." In addition, the acute care area for patients in the hospital must be in a seismically safe building.
Urgent Care Clinics are becoming increasingly popular for their ability to make healthcare more readily available and affordable, but they are not a substitute for emergency rooms. They rarely operate 24/7 and invariably lack the sophisticated medical imaging and patient support equipment needed to diagnose and treat medical emergencies, such as traumatic injuries, strokes, heart attacks and other potentially life-threatening conditions. Scripps Health provides a good explanation of the differences among emergency rooms, urgent care clinics and walk-in clinics in an article titled "Should You Go to the Emergency Room or Urgent Care?" available online at www.scripps.org/news_items/4231-should-you-go-to-the-emergency-room-or-urgent-care.
Legally, yes. Practically, no. The finances of rural hospitals like ours (with revenues coming mostly from Medicare and Medicaid) make them unattractive to the major healthcare providers, which depend on revenue coming mostly from higher-paying private medical insurance companies. And John C. Fremont Hospital would be even less attractive as an acquisition given the need to build a new hospital. The fact is: No major healthcare provider has ever approached the District, but if one were interested, the residents of Mariposa County would need to approve the sale in a special election. And because that would mean forfeiting the ability residents now have to elect the governing Board of Directors, a majority would likely vote no.
The rigorous planning involved is expensive, and the money needed to pay the architects will not be available until a source of funding is secured. This initial phase of design and approval will also involve the construction company, whose planning role will be to estimate costs, enabling the District to make fully informed decisions regarding what and what not to include in the plan submitted to the state for approval.
If the Citizens Initiative passes, the design and approval phase will begin immediately. This initial phase is expected to take 2 to 3 years to complete, and will be followed by securing long- term financing for the construction project. Although there remain some unknowns, construction can be expected to begin in year 3 or 4 and take 2 to 3 years to complete. With the new hospital fully operational in advance of the 2030 deadline, work will then begin on modifying and repurposing existing facilities to serve other needs. It is important to note that sales tax receipts not used during the design and approval phase will be placed in reserve for paying off the bond or loan used to finance the construction phase, or for other purposes permitted by the Expenditure Plan.
The future uses for existing facilities will be determined during the design phase of the new hospital. For example, the primary care clinic was built fairly recently in 1996 and will likely remain a clinic, potentially with some improvements. Existing facilities could also be used to expand skilled nursing services beyond the current Ewing Wing, for administrative offices or for some other purpose that might be identified.
The total cost cannot be known until the plans are finalized. But what is known now is that similar healthcare districts serving similar communities have spent between $60 million and $80 million on new seismically safe hospitals. Because building costs are constantly increasing, the District expects the final cost to be near or potentially above the high end of that range.
This money is earmarked 100% for the purposes explicitly outlined in the Expenditure Plan (included verbatim in another question) and cannot be used for any other purposes. Measure O also includes an Accountability and Transparency section that requires the Healthcare District's Board of Directors, in an open, public process subject to the Brown Act, to do the following:
- Establish a separate "Save the Hospital" Fund wherein all sales tax proceeds generated shall be deposited
- Prepare or cause to be prepared a General Implementation Plan for implementing the Expenditure Plan
- Prepare or cause to be prepared Quarterly Financial Reports summarizing any expenditures pursuant to the Expenditure Plan and General Implementation Plan
- Prepare or cause to be prepared Annual Progress Reports describing progress made on the Expenditure Plan and General Implementation Plan
No. All funds are earmarked for the John C. Fremont Healthcare District, and the District can only use the funds for those purposes explicitly outlined in the Expenditure Plan.
About the John C. Fremont Healthcare District
No. The John C. Fremont Healthcare District covers the same geographic area as Mariposa County, which is why some people might believe it is a county hospital. But John C. Fremont Hospital is a community-owned hospital that is governed by a locally elected Board of Directors (not the Board of Supervisors) accountable to Mariposa County residents.
No. Just as the Mariposa County Unified School District and the Mariposa Public Utility District are separate entities governed by their own separate boards of directors, the John C. Fremont Healthcare District is a separate entity governed by its own separate Board of Directors elected by the citizens of Mariposa County.
No. Healthcare districts are public entities that provide community-based healthcare services to residents in established districts throughout the state. In our case, the citizens of Mariposa voted overwhelmingly in 1947 to build a hospital in the town of Mariposa by creating a county-wide Hospital District (now called a Healthcare District). Each of California's healthcare districts is governed by a locally elected Board of Directors who are directly accountable to the communities they serve. The John C. Fremont Healthcare District is a member of the Association of California Healthcare Districts (ACHD), which offers additional information on the Web at www.achd.org for anyone interested in learning more.
A good overview is provided by this excerpt taken from a guide published by the California HealthCare Foundation (https://www.chcf.org/wp-content/uploads/2017/12/PDF-CaliforniasHealthCareDistricts.pdf): “First established in 1946, health care and hospital districts are a form of local government known as a ‘special district,’ described under California state law. Special districts are designed to provide a particular function in a specific geographic area and are governed by an elected board of directors. Special districts are independent from city or county governments, which traditionally provide a variety of services in a larger geographic area. The districts provide such unique services as police, fire, sanitation, health care, water, waste disposal, lighting or landscaping services. They are created at the will of local residents to fulfill a particular need not being met by other governmental or private agencies… To respond to the inadequacy of acute care services in the non-urban areas of the state, the California legislature enacted the Local Hospital District Law (section 32000 et seq. of the Health and Safety Code) in 1945. The intent was to give rural, low income areas without ready access to hospital facilities a source of tax dollars that could be used to construct and operate community hospitals and health care institutions, and, in medically underserved areas, to recruit physicians and support their practices (e.g., subsidies, office space, equipment).”
The hospital's finances are audited by an impartial outside firm of experts every year, and the resulting report is public information that is posted on the District's website (www.JCF- Hospital.com). These reports reveal the financial situation improved substantially when the District recruited experienced professionals in key administrative positions several years ago. The District was also criticized at the time for using "outsiders" rather than Mariposans. But the fact is: running a hospital takes special talent, and having that talent here has made John C. Fremont Hospital a well-run operation. The prudent fiscal management has also enabled the hospital to expand services, recruit more specialists and reduce turn-over by boosting employee morale. And when something is working well, there is no need to make a change, so the community should expect these best practices to continue.
The hospital is able to cover its regular operating expenses, and the District is proud of being able to do that responsibly. Building a new hospital to current seismic safety and other building standards is not a regular cost, however. This is why rural hospitals like ours inevitably need some form of special financing, such as the sales tax in Measure O.
Information on the John C. Fremont Healthcare District website: www.JCF-Hospital.com